This JARS Money Management System Can Work Miracles For You

At my Millionaire Mind Intensive course, and in part of my book Secrets of the Millionaire Mind, I teach a very effective money management method— designed specifically to get you to financial freedom — called the JARS money management system.

Basically, using this system, you split your money up into six different accounts, and you have percentages of your money to put into each account. You can use bank accounts or actual jars.

So what are these jars and what percentage of your income goes into them?

Let’s take a look in the infographic below…

The 6 “Jars” & How Much Money To Put Into Them

The 6-jars system is one of the many strategies I highlight in my free webinar, Fastrack to Freedom.

The Habit Is More Important Than The Amount

A lot of people would say, “Harv, I’d love to do the JARS system, but I can’t do it because not enough money is coming in” or “My expenses are too high, there’s no way I can do these percentages.”

If you’ve been with me long enough, or know of me long enough, you know what I’m going to say to that, yes?

Bullsh*t!

Am I saying you have to put $1,000 into your accounts every day? No, I didn’t say that.

How come I’m not suggesting a specific amount but certain percentages? It’s so that every single person, regardless if they’re earning $100,000 a week or $1 dollar a week, can follow this money management system. Yes, if you are earning $1 dollar a week, you can do this system.

The habit of managing your money is much, much more important than the amount.

The Fastest Way To Do Well With Money Is To Manage The Money That You Have Well

I don’t care if you’re managing $100,000, $1,000, $100, $10, $1 or 10 cents. All that matters is you learn money management skills.

Right now you may be thinking, “I’m not earning a lot of money. I don’t even know how I could do this.”

So let me give you a prime example… a story about a woman by the name of Michelle Burr.

She was broke when she came to my course Millionaire Mind Intensive course. She said the money management portion was the thing that resonated with her, the thing that she absolutely wanted to work on the most. She didn’t know how to manage her money, and she didn’t have any money to manage.

What did she do? She took $1 and divided it into nickels, dimes and pennies. She put them into the six different jars and according to the percentages I recommend for this money management system.

She had 10 cents to play with (from her Play Jar — 10% of her income), so she went to the store and bought some bubble gum. She read the comic in the bubble gum and laughed. That was as much as she could play with at the time.

She saw that it wasn’t going to be enough, so she made it a point that every week she was going to double the amount she was putting in the jars.

So the first week she put in $1. The next week she managed $2, and so on and so forth. Twenty weeks later, she was managing $100.

Here’s the thing: The way the universe works is if you manage your money, you will get more.

If you mismanage your money, you will not get any more.

The fastest way to do well with money is to manage the money that you have well. Just show the universe you know how to manage $1. Then watch what happens in your life.

Miracles do happen.

Fast forward. Let’s see how Michelle is doing today. She is a self-made woman. She never gets a dime from anybody else.

Michelle has made many investments in real estate and other things. Michelle is a multimillionaire today. It wasn’t very long ago she was managing $1.

So don’t give me or yourself any BS about how you can’t do this.

Decide right now: Are you going to get 6 jars and start managing your money today?

Declare your intentions to the universe that you are going to turn your finances around right now and let us know how it’s going.

Want to discover exactly how I and others trained by me became financially free, and how you can become free too?

Comments

Just a heads up to let you guys know that I went from zero (yes, zero) savings to R$ 50k today (that’s brazilian reais) by applying your jar model. I work for the government and despite getting R$ 5k a month I was only making horrible choices for my money. From zero to here I’ve learned: how to be free (from the idea of needing money, but instead embraced the idea of having it as a tool); how to handle my incomes; how to share my incomes with the world (by helping others with my saved donation money); how to keep learning every single day.

After taxes, those $100 should be split into the 6 accounts in those percentages you know. The point behind this elegantly simple system is to acquire the habit of managing, focus on abundance and stop focusing on lack.

I started managing $430 that I had saved and used that amount to bridge between the old me (work-earn money-pay for expenses) and the new me (a world class money management machine). And my first money miracle happened two days later in the form of an unexpected $860 deposit! Two days later!

Now the first thing I do when I receive *any* amount is go and split it and feel like a kid again! Now I pay rent on time, I’m never worried about my card being rejected, and last year bought more books than the rest of my life, I even launched an online business!

No this systems does not require that you are debt free. I am doing it because I have debt and no longer want to be in debt. I can see how this system works very well if you are in debt. Necessities means as I understand everything that you HAVE to pay. That means mortgage and any loans or any other debts. You mention passive income streams. But I think you need to add together all your income including your passive income and then divide it up according to the jar system. I wish I had known this before … teach this to your children.

Harv, it is quite interesting the clue is to get to that point when you manage those percentanges; maybe we can start with some little different values while covering some additional expenses but starting right now and during the process we can adjust it until we are at the suggested numbers. I think there is no excuse to begin today.
Thank you.

I have read The Secrets of the Millionaire Mind Book (currently for the fifth time!) and it has changed my life so powerfully. I would really appreciate some guidance on the JARS system, relating to my PERSONAL scenario and business.

I buy and sell cars, so I’m not sure from which jar/ account I would take money from to invest into my stock of cars? Each car is an investment, but if I only had 10% of my income to use (from the FFA account) I would hardly buy any cars, and I feel negatively about borrowing money from the banks?

Hi Dan,
You have to first differentiate between your capital and your wage. You need a pool of cash to run your car business.That is your capital.
Place yourself on a salary based on your margin and other expenses. It is this that you apply to the JARS system. Your salary, not your capital
I hope this helps.

Is 55% for NEC enough if I am a contractor? No taxes are taken out from my check. I have to pay all of that myself. Should I have a separate jar for taxes at like 20% right off the top or something… or will 55% of the gross compensate for for the tax implications.as well. I think I may not be seeing the math correctly.

I don’t think you can apply the jar system if you are self employed. Some how you would have to take off all your expense BEFORE you could use the jar system. As most small business people know, at the end of the day you usually have a net loss, or average close to zero profit. What do you do then, take all your money back out of the jar during a year with losses?. Good thought in a perfect world but the reality of it is there is always financial ups and downs and in the end you will average out with very little. I speak from experience. Having been in the small business community for over 40 years. This system is perfect for someone with at JOB!

Thanks Scott for comment but that’s not true. Managing your money works for anyone. If you aren’t doing it then you’re just making up excuses for why it doesn’t work for you.

We have thousands of real estate professionals/self employed professionals who use the jar system it just takes discipline. In fact, our largest market of students are people who are self-employed and this is one of Harv’s most famous teachings so you may be speaking from your own experience but have you ever tried this system? If not, then your experience might be vast in business it’s limited in this arena. This system has been taught hundreds of thousands of students from around the world – thousands and thousands of them have gotten financially free using it.

For Real estate professionals or commission based professions, you need to take the lump sum commission and spread it around. Maybe the % of what we suggest isn’t what you’ll do but you still manage it. The habit is more important than the amount… How are you supposed to save without managing your money? How are you supposed to invest without managing your money? Without managing your money means your going to struggle financially.

Do you pay yourself a salary? Do you take owner compensation? Whatever money you take personally should be managed. If you pay for all your personal expenses through your business then you should give yourself a consistent amount each month so you CAN manage your money. Without that, you are shooting in the dark.

KC – What we do is take our taxes off the top and put them into their own account, yes. What we do after that is give ourselves a consistent amount of money each month to manage…If it’s not consistent then just take small amounts to manage.

You can also take your income, deduct your taxes and then calculate how much you should manage in each jar based on the income you pulled from that month or job. Just start small. Again the habit is more important than the amount.

Can anyone share their practical way of working the jar system? I don’t feel comfortable getting actual jars out and distributing my monthly paycheck. Setting up 6 accounts on my bankaccount seems too much of a hassle too, so I’m really interested in how others do it to keep it surveyable.

Sure I use online banking. I have different accounts for different jars. I use an excel sheet (the one we provide in our FreedomFirst Wealth coaching program) to tell me what I have to transfer to each one of my bank accounts depending on how much money I have. The jars are there so you can visually see yourself managing your money. It helps with building the habit but you don’t need them. Other people use envelopes as well. Let me know if that answers your question.

Charlotte, im with jesse using bank accounts. only mine are sub accounts i have set up with the bank and called them the jar name. eg medical fund, bills account, my savings a/c, my husbands savings a/c ( yes we have separate savings a/c to spend as we wish. (it was only $10 each per week at the time, but adds up over time) once i set them up with the percentage or regular amount i wanted to go into each sub account, i leave it to do its own thing each pay. after doing this for 1 year, for the first time in many years we had money in the bills account to actually pay the rates ahead of due date and not stress where we were going to find the money. it just took me to realise i needed to actually stop and look at what we were spending, how much, when and what for. I did this on a 1 year spread sheet, which meant i needed to go back a year to get a better picture with 1 year of data, then set up what i needed to save for and by when. it was not easy for the first few months because there were more coming out of my account than what went in, but on other months there was more going in than coming out, so it evened out for me. now it is automatically growing as i add more into the sub accounts with the $ changes we have. this actually means sitting and doing a budget to get the figures, oh what a shock that is, i can tell you. but we do spend not knowing where from at times. credit cards make it easy to overspend each month unless we are on top of it.
my sons have also started budgeting and seeking financial freedom. The youngest payed off all his debt and credit cards in 10 months with really looking at what was important to him, sacrificing a few things to start with but now owns a car, savings towards a home and no credit card debt. a great achievement for such a young lad. it can be done, just need to start somewhere and believe in yourself and now is a good time to start, believe me. Happy budgeting and saving.

hi harv,
i have been a startup and employ around 10people. at the end of the month i do not have sufficient money to manage and look for external sources to match the salaries to be paid. Business is good but i wasnt able to manage it right .Have certain debt which keeps draining all the income generated. How will i over come this kid of situation

This is the most effective many management system ever. I only wish I had been exposed to this in my 20’s. So now I get to share with my kids who are in their 20’s. The best part of that is they have the opportunity to truly live debt free.

I like how Harv puts it: “In soccer there are 11 players on the field, lots of players? Yes. But try to win the match just with one player.”

For me it sounded too much at first but decided to go all in, trust the ones who are walking the walk, you know? And just like Jesse mentions here, my hardest obstacle was starting! Now I enjoy splitting any amount I receive into my 7 jars.

My husband and myself have been reading your ebooks. We offer a service which is dog boarding. So the big trend right now is grooming so we are getting a grooming room ready to go. We will be starting the jars. Are big problem is we don’t budget anything. So we stumbled on to you for a reason. Here starts are new life with being free first then rich if we choose to be.

Harv, Jess, and Team,
Thank You for posting this! I have just sat down and applied it to my income, and while it may take a bit to achieve ti ideal percentages, Today is the start!
Oh, and I’ve just ordered a copy of Harv’s book. Thanks again!

Hello team,
I love the system, and though I can’t fully implement it right now, since my necessities are far more than 55% of my total income, I’ll do the following strategy: 10% of everything I get goes to my “Pay me account”, I’ll separate the money I need for necessities and organize what’s left using the 6 jars system. Do you think that might work?
I do have some additional questions, though:
– The “give” jar, can it be used for gifts or for helping a friend/family member in need (for instance, helping them pay their debts.
– My kids education goes to the necessities jar, right?
– Can I increase the long term savings for spending jar percentage, in detriment of the play jar percentage? I mean, travel is a very big deal for me and it’s quite an expensive one too, so I would rather save for travel and play then. Could I put something like 15%-5%?
Thanks in advance for your advice and many thanks for this amazing article!

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